Brough's writings on the technology, economic and social issues of communications at the intersection of the Internet, telecom and mobility.

April 17, 2010

Africa moves from satellite to fiber links

2009-2010 marks an exciting transition for the Internet in Africa.

Historically, most countries had only satellite connections or a connection to a single submarine fiber optic cable (SAT-3) controlled by an incumbent monopolist. Not surprisingly, prices for SAT-3 bandwidth in the African countries it serves were high (US$4,500–12,000 per Mbit/s per month, vastly more than than bandwidth prices in the US or EU).

But finally, things are changing, radically. Beginning in 2009, the Seacom cable connected eastern and southern Africa with Asia and the TEAMs cable reached Kenya. Now four more cables (Glo One, Main One, EASSy and LION) are coming on line in 2010, with WACS and ACE expected in 2011-12. Steve Song has an excellent map and more details here.

Impact on Satellite services

Balancing Act Africa has a new market study out which projects African bandwidth markets through 2014. Among other conclusions summarized in recent letter from Russell Southwood:

The overall balance of satellite vs fibre use in Africa’s top Sub-Saharan markets 20 markets goes from 45.6% vs 54.4% in 2008 to 11.9% to 88.1% in 2014. Of these top 20 markets, the top 5 markets (South Africa, Nigeria, Kenya, Angola and Sudan) make up the majority of bandwidth demand across the continent and are the countries that will experience the fastest bandwidth growth over the period. So satellite operators and resellers will not only be selling into a smaller share of the overall bandwidth market but will become niche players in many countries. There will be growth but most of it will be on fibre.

After three and a half years since December 2005 in which only ten satellites were launched with coverage over Africa (four of which failed), at least 36 new satellites will be launched by the end of 2013, costing between US$4.4 billion and bringing the equivalent of 26,325 MHz of additional capacity over the region. By the time the second constellation of O3b satellites is launched, there will be almost as much Ka-band capacity over Africa as the total stock of C- and Ku-band capacity.

The satellite operators have invested huge amounts in new and replacement satellites. US$ 4.395 billion will be invested in new and replacement satellites against US£2.15 billion in seven international submarine cables, excluding ACE where the budget has not yet been announced. The satellite operators are investing at a time when the tide is turning against satellite use.